Commentary Operations Sugar cane Deciduous fruit Bananas Macadamias Property Prospects

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1 and dividend declaration for the six months ended 30 September 2017

2 Commentary The period under review has been challenging in the wake of the drought and under the prevailing tough economic conditions. Profit after tax decreased by 70,5% to R26,4 million (2016: R89,4 million) driven mainly by a decrease in sugar cane revenue and a write down in the cane biological asset value, both factors resulting from the aftermath of drought conditions in the sugar producing areas. Commensurately, operating cash flows decreased by 33% to R115,9 million (2016: R173,5 million). Good progress was made in bringing our development projects to fruition, in particular the macadamia project in Mozambique and the property development at Renishaw. This is reflected in capital expenditure of R87 million and a similar value of working capital, utilised in the construction of housing stock by Renishaw Property Developments, both of which were funded from existing cash and debt facilities. As indicated in our integrated report we intend raising short and medium-term debt of approximately R200 million to bring these other projects into production over the next two years. The board cautions against using interim results to project full year earnings, due to the effect of seasonality of crop revenues and the impact of biological asset valuations on earnings particularly in the deciduous and macadamia segments at half year. Operations Sugar cane Revenue decreased by 9,6% to R240,5 million (2016: R265,9 million) driven by a decrease in sugar prices in South Africa and Zambia and a production decrease attributable to a decline in area under crop of 646 hectares caused by the drought. These factors also resulted in a biological asset write down of R43,8 million (2016: R10,1 million) for the six-month period ended 30 September Consequently, sugar cane operating profit decreased by 49,5% to R67,8 million (2016: R134,3 million). Deciduous fruit Despite the precarious water supply position in the Western Cape, water resources at the group s deciduous farms in the Elgin-Grabouw-Villiersdorp area, supplied mainly from farm dams and boreholes, are adequate to meet the 2017/2018 summer requirements. While prices in the year to date have followed the depressed trend of the previous year, firmer prices are expected for our 2018 deciduous crop, which will be harvested in January through to May. The deciduous operating loss of R18,3 million (2016: loss R24,8 million) includes operating costs incurred in the preparation of our 2018 deciduous crop which are not accounted for in the biological asset valuation at half year. These costs will be recovered from revenue from the 2018 crop. Bananas Banana operating profit decreased by 42,8% to R15,1 million (2016: R26,4 million) due mainly to a lag in production for the six months to September 2017 when compared to the prior corresponding period, again, driven by the drought and early season storm damage. Production is expected to catch up over the balance of the season and the annual production should compare favourably to that of last year. Banana prices remain firm in South Africa and Mozambique following the effects of the drought. Macadamias We are expecting our first significant macadamia crop in March This will be accounted for in the biological asset valuation at 31 March Revenue and operating profit for the period ending September 2017 arises from our first small crop of 52 tons dry-nut-in-shell, which was harvested in the first three months of this financial year. Property In the six months ending 30 September 2017, Renishaw Property Developments closed contracts for 58 units in the lifestyle village currently under development. Of these, only 11 units were transferred by 30 September 2017, which is reflected in revenue of R16,5 million. Since then, 16 units have been transferred and we expect a further eight units to be transferred before year-end. Prospects Although profitability for the six months ended 30 September 2017 is down on that of the prior period, it is in line with our expectations, particularly given the impact of the drought on our sugar cane operations. We expect results for the full year to reflect a recovery from the current position, with a firming of the deciduous markets and the macadamia and property projects contributing for the first time. An expected recovery to normal rainfall in the Northern region also bodes well for the following financial year. 1 Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September 2017

3 Commentary continued Interim cash dividend declaration The board continues to maintain a conservative dividend policy, given the group s ongoing growth and investment strategy. The board has declared a gross cash dividend of 35,0 cents (2016: 50,0 cents) per share for the six-month period ended 30 September 2017, payable to shareholders recorded in the register of the company at the close of business on the record date, Friday, 5 January In respect of the gross interim cash dividend the following further information is provided: the dividend has been declared from income reserves; the dividend withholding tax rate is 20% resulting in a net dividend of 28,0 cents per share to those shareholders who are not exempt from the dividend withholding tax; the company s income tax reference number is 9696/001/71/9; and the issued number of shares as at declaration date is The interim dividend will be paid on Monday, 8 January 2018 to shareholders recorded in the register of the company at close of business on the record date Friday, 5 January The salient dates of the declaration and payment of these dividends are as follows: Last day to trade cum-dividend Tuesday, 2 January 2018 Shares commence trading ex-dividend Wednesday, 3 January 2018 Record date Friday, 5 January 2018 Payment date Monday, 8 January 2018 Share certificates may not be dematerialised or rematerialised between Wednesday, 3 January 2018 and Friday, 5 January 2018, both days inclusive. Any reference to the group s future financial performance included in this announcement has not been reviewed nor reported on by the company s auditors. For and on behalf of the board JR Barton GS Clarke Chairman Managing Director Durban 29 November 2017 Registered office and postal address 170 Flanders Drive, Mount Edgecombe, KwaZulu-Natal PO Box 611, Mount Edgecombe, KwaZulu-Natal, 4300 Website Transfer secretaries Computershare Investor Services Proprietary Limited PO Box 61051, Marshalltown, 2107 Sponsor Sasfin Capital A division of Sasfin Bank Limited Directors JR Barton* (Chairman), GS Clarke (Managing), GL Veale (Financial), T Abdool-Samad*, RGF Chance*, TJ Crookes* TK Denton* #, P Mnganga*, MT Rutherford*, RE Stewart*, G Vaughan-Smith* # *Non-executive director # British Company secretary Highway Corporate Services Proprietary Limited Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September

4 Condensed consolidated statement of profit or loss Restated Audited Six months to Six months to 12 months to * 2017 Note R 000 R 000 R 000 Revenue Operating profit before biological assets Change in fair value of biological assets (57 803) (34 278) Operating profit after biological assets Share of profit of joint venture and associate companies Dividend income 97 Net finance (cost)/income 1 (7 232) Profit before tax Income tax expense (10 252) (34 663) (34 655) Profit for the period Profit attributable to: Owners of the company Non-controlling interests Earnings per share Basic (cents) 47,2 381,2 424,7 Diluted (cents) 47,1 380,2 424,6 Headline earnings per share Basic (cents) 47,2 380,9 424,1 Diluted (cents) 47,1 379,9 424,0 Dividend per share Interim (cents) 35,0 50,0 50,0 Final (cents) 115,0 3 Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September 2017

5 Condensed consolidated statement of other comprehensive income Restated Audited Six months to Six months to 12 months to * 2017 R 000 R 000 R 000 Net profit for the period Other comprehensive income Items that may not be reclassified subsequently to profit or loss, net of tax: Remeasurement of defined benefit surplus (211) Remeasurement of post-employment medical aid obligation 462 Items that may be reclassified subsequently to profit or loss, net of tax: Net fair value loss on available-for-sale financial assets (46) Exchange differences on translating foreign operations Total comprehensive income for the period Total comprehensive income for the period attributable to: Owners of the company Non-controlling interests Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September

6 Condensed consolidated statement of financial position Restated Audited * 2017 # R 000 R 000 R 000 ASSETS Non-current assets Property, plant and equipment Other financial assets Investment in joint venture and associates Unsecured loans Deferred tax assets Current assets Inventories Biological assets Trade and other receivables Current tax assets Retirement benefit surplus Unsecured loans Cash and bank balances Total assets EQUITY AND LIABILITIES Capital and reserves Share capital and premium Investment revaluation reserve Foreign currency translation reserve (23 319) (23 373) (23 764) Share-based payment reserve Retained earnings Equity attributable to owners of the company Non-controlling interests Non-current liabilities Deferred tax liabilities Long-term borrowings: interest-bearing Long-term liability: interest-free Current liabilities Trade payables, other payables and provisions Short-term borrowings: interest-bearing Outside shareholders loan Current tax liabilities Dividend withholding tax 63 Post-employment medical aid obligation Bank overdraft Total equity and liabilities Net asset value per share Number of shares In issue Weighted average (basic) Weighted average (diluted) # Reclassified demand deposit facilities to bank overdraft. 5 Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September 2017

7 Condensed consolidated statement of cash flows Restated Audited Six months to Six months to 12 months to * 2017 # R 000 R 000 R 000 Operating activities Operating profit for the period Other comprehensive income 348 Depreciation Change in fair value of biological assets (22 998) Other non-cash items (7 647) (6 305) Operating cash flows before movements in working capital Net outflow from changes in working capital (87 749) ( ) (51 505) Interest received Interest paid (7 866) (3 164) (5 453) Income taxes paid (3 038) (6 769) (15 962) Net cash generated by operating activities Investing activities Proceeds on disposal of property, plant and equipment Investment in joint venture and associate companies (951) (29 418) (31 798) Investment in property, plant and equipment (87 824) (33 577) ( ) Other net investing activities (1 719) (212) Net cash flows before dividends and financing activities (69 193) (99 905) Dividends paid (17 554) (17 554) (36 081) Net (decrease)/increase in borrowings (20 165) Net decrease in cash and cash equivalents ( ) (156) (93 773) Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period (74 942) # Reclassified demand deposit facilities to bank overdraft. Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September

8 Condensed consolidated statement of changes in equity Restated Audited Six months to Six months to 12 months to * 2017 R 000 R 000 R 000 Balance at beginning of period Share-based payment expense 980 Total comprehensive income for the period Dividends declared and paid (17 554) (17 554) (36 081) Total equity Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September 2017

9 Condensed consolidated segmental analysis Restated Audited Six months to Six months to 12 months to * 2017 R 000 R 000 R 000 Revenue Sugar cane Deciduous fruit Bananas Macadamias Property Other operations Operating profit Sugar cane Deciduous fruit (18 306) (24 861) (10 386) Bananas Macadamias^ Property (646) (1 530) Other operations (2 037) Group overheads (20 736) (19 353) (49 563) ^ Operating profit from the macadamia operation in the current period arises mainly from the sale of macadamia nuts, whereas operating profit from the corresponding prior period is mainly due to foreign exchange gains from the translation of foreign operations. Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September

10 Condensed consolidated notes Restated Audited Six months to Six months to 12 months to * 2017 R 000 R 000 R Net finance (cost)/income Interest paid (7 866) (3 164) (5 453) Interest received (7 232) Headline earnings Profit for the period attributable to owners of the company Adjusted for: Gain on disposal of property, plant and equipment (73) (128) Tax effect of the adjustments Headline earnings Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September 2017

11 Condensed consolidated notes continued 3. Change in functional currency Mozambique operations With effect from 1 April 2016, due to changes in trading arrangements that meet the requirements of IAS 21:36, the functional currency of the group s Mozambique operations changed from Meticais (MZN) to Rands (ZAR). In accordance with IAS 21:37, the group has applied the new functional currency prospectively from 1 April 2016, with the prior interim period ended 30 September 2016 restated accordingly. The effect of the change in functional currency on the measurement of account balances and transactions disclosed in the consolidated financial statements is as follows: Non-monetary assets translated at the actual ZAR/MZN spot exchange rate at the date of acquisition or disposal. Monetary assets translated at the closing ZAR/MZN spot exchange rate as at 30 September In the case of ZAR denominated cash and bank balances, measured at the actual ZAR amount in the bank account as at 30 September Liabilities translated at the closing ZAR/MZN spot exchange rate as at 30 September In the case of ZAR creditor and loan accounts with related or unrelated parties, measured at the actual ZAR amount owing as at 30 September Equity (including share capital) translated at the historical exchange rate at the date of issue of the equity instruments. Opening retained earnings recorded at the actual ZAR value of closing retained earnings, as at the end of the previous financial year. Current year profit or loss translated at the average ZAR/MZN exchange rate for each month, in which the transaction was recorded, or the actual ZAR/MZN spot exchange rate where practiceable. The foreign currency translation reserve as reported in the prior year, is retained in the current year and in future financial periods. 4. Basis of preparation and accounting policies The condensed consolidated unaudited results for the half-year ended 30 September 2017 have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the information as required by International Accounting Standard 34 Interim Financial Reporting and the requirements of the Companies Act of South Africa, as amended. The report has been prepared using accounting policies that comply with IFRS which are consistent with those applied in the financial statements for the year ended 31 March 2017 and were prepared by Mr N Naidoo CA (SA) under the supervision of the Group Financial Director, Mr GL Veale CA (SA). Crookes Brothers Limited has adopted all the new or revised accounting pronouncements as issued by the IASB which were effective for Crookes Brothers Limited from 1 January The adoption of these standards had no recognition and measurement impact on the financial results of the current reporting period. 29 November 2017 Sponsor SASFIN CAPITAL (a member of the SASFIN Group) Crookes Brothers Limited Interim results and dividend declaration for the six months ended 30 September

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